With a white-hot residential scene, many West Coast buyers find that they have to pay excessively high prices for older, less fashionable options. Kenny Slaught notes that home costs have been steadily rising since 2008, and our reference, the Standard & Poor’s Case-Shiller home price index, shows that Los Angeles home prices peaked during April of this year, their highest point since October 2007. Southern California’s larger metropolitan areas have moved recession recovery beyond and are closing in on their former peaks, and Slaught says this turnaround can be attributed to a number of factors including interest rates, job growth and supply and demand. Currently, 30-year, fixed-rate mortgages are hovering around 3.5% or less, nearing the 3.31 percent record low hit in November 2012, and are pushing many toward buying. These historically low rates, along with strong employment numbers, such as a 2.4% rise in Los Angeles County and a 3.5% gain in Orange County, point to just why values have appreciated in an extraordinarily fast-paced manner. And despite home prices varying considerably throughout the state, the inflated asking price of higher-end homes is outpacing all other states with the exception of Hawaii. The slim supply available cannot meet the feverish demand for housing, therefore many first-timers are forced to opt for condominium-style units which are both obtainable and within a more modest price range.
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